When considering safety stock and its effect on EOQ, which of the following statements is false?
A. The reorder point is affected by the existence of safety stock.
B. Safety stock decreases the potential costs caused by inventory shortages.
C. Fluctuations in monthly usage of a material indicate the desirability of a safety stock.
D. Safety stock is equal to the potential excess usage of an input.
E. Safety stock decreases inventory holding costs.
Answer: E
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